The Wannabe Rainbow

[droesparky]

This was originally a scalping method, I have made changes to it and am using it on the 1 hr TF now.

1 Hr. chart.
there are 12 WMAs, 3, 5, 7, 9, 11, 13, (make these one color)
15, 17, 19, 21, 23, 25, 27 (Make these one color)
Slow Stoch 30, 10, 10
Bollinger Bands with settings 18,2 - 18,2.2 - 18,2.4 --thru-- 18,4.6
make these bands different colors fo a more attractive chart.

entry long is when price closes on the upper side of the MAs. and stochastic is oversold or comeing out of oversold
entry short is when price closes out of the lower side of the MAs and stochastic is overbought or just comeing out of overbought.
Do not enter if the candle is so long that it is already at the BBs
One more thought on this is if the bands squeeze tight then the run can and often will climb up or down the BBs, this is when you want to set stop to BE quickly and let it run.


there are two suggestions for stops
one is the opposite end of the candle that closed outside the MAs. two is the last high or low
target is the Bollingerbands, or move stop to be and let run for more profit.

[seven]

i have seen the similar method using rainbow MA...
for me rainbow system works very well on small TF such 5m for reentry at the middle of the trend as long as u identify the trend

[droesparky]

Ive changed The Wannabe Rainbow a lot.
Now use it on 1 hr TF, with addition of BBs

Here was todays trade I took 35 pips and left some on the board.

[BillB]

Originally Posted by droesparky

This was originally a scalping method, I have made changes to it and am using it on the 1 hr TF now.

1 Hr. chart.
there are 12 WMAs, 3, 5, 7, 9, 11, 13, (make these one color)
15, 17, 19, 21, 23, 25, 27 (Make these one color)
Slow Stoch 30, 10, 10
Bollinger Bands with settings 18,2 - 18,2.2 - 18,2.4 --thru-- 18,4.6
make these bands different colors fo a more attractive chart.

entry long is when price closes on the upper side of the MAs. and stochastic is oversold or comeing out of oversold
entry short is when price closes out of the lower side of the MAs and stochastic is overbought or just comeing out of overbought.
Do not enter if the candle is so long that it is already at the BBs


there are two suggestions for stops
one is the opposite end of the candle that closed outside the MAs. two is the last high or low
target is the Bollingerbands, or move stop to be and let run for more profit.

Looks good on everything but the CHF.
Do yuo need so many BBs?
The first two or three are always on the inside.

[droesparky]

Dont really need all the BBs its kinda like the original Rainbow system you didnt need all those MAs. Change it to fit your style and the pair you trade.

It wont work during slow periods of consolidation thats when you just need to set a high/low trap and trade the break, and remember to watch out when price hits the BBs. It usually take some strong news to push past the BBs. so if its a light news or no news move get out at the BBs.

I use it on GBP/USD.
maybe drop down one timeframe for chf and try it on 30 min.

[droesparky]

Also do some backtesting manually and it will give you some confidence in the system.